THE STORY OF STUFF

by Annie Leonard

  When I first got onto the GoodGuide site, I looked up Pantene Pro-V hair conditioner, which I used for years until I found out about the crummy chemicals inside it. On GoodGuide, I read about other reasons not to love the parent company (Procter & Gamble), to whom I then sent a message: “Why does my hair conditioner have toxic chemicals? Why does your company have such a lousy air pollution score? I am not buying this anymore!” One message is easy to ignore, but not thousands. O’Rourke says that “send a message to the manufacturer” is the second-most-clicked button on GoodGuide and that a handful of companies have already switched away from toxic ingredients since receiving overwhelming consumer responses.19

  O’Rourke’s project provides all of us massively increased access to information about the supply chains of the products we use, so we can make better choices—better choices for our families, the workers making this Stuff, and the global environment. Some people call this “voting with our dollar.”

  While I am a big fan of GoodGuide and recommend we all make a habit of scouring its pages, I also want to add that what’s really needed is to vote with our votes, not just our consumer dollars. Informing and convincing every parent on the planet to use GoodGuide to learn how to avoid toxic chemicals in children’s shampoo is an impossible task, but uniting with a group of parents to lobby to change the laws that allow toxic chemicals in children’s shampoos is possible. That is why I see GoodGuide, and other efforts at promoting supply chain transparency, as great transitional tools. They educate. They inspire. They encourage healthy and fair products and companies over nasty ones. They allow us to send messages up the supply chain to decisions makers to, I hope, inspire change for the better. But ultimately, we must remember—as Allegheny College political science professor Michael Maniates says—the choices available to us as consumers are limited and predetermined by forces outside the shopping market. Those forces can best be changed through social and political activism.20

  Trucks and Container Ships and Planes, Oh My!

  Ships, trucks, roads, planes, and trains are needed to move Stuff along this globalized supply chain. The transportation infrastructure consumes enormous quantities of fossil fuels and spews out waste, but these are some of the most hidden of externalized costs in consumer goods, and most people are completely unaware of them. Even those shoppers who are aware of the source of the materials in products, the ones who know to ask whether diamonds fueled violence in Africa or whether the cotton fields in Turkey used pesticides, rarely know what to ask about how goods are transported.

  For starters, most Stuff imported from Asia comes across the ocean in containers loaded on gigantic barges. Water carries 99 percent of American overseas trade by weight.21 Annual water freight was about 1.5 billion tons in 2004, worth nearly $1 trillion, and container traffic is expected to triple in the next twenty years, with most of that coming from China, India, and other places in Asia.22 The global shipping business consumes more than 140 million tons of fuel per year and contributed 30 percent of developed countries’ CO2 emissions from fossil fuel combustion in 2005 (and 23 percent of the world’s emissions, including developing nations).23

  “Ship Sulfur Emissions Found to Strongly Impact Worldwide Ocean and Coastal Pollution: Trade-carrying cargo ships powered by diesel engines are among the world’s highest polluting combustion sources per ton of fuel...”24 “Pollution from Marine Vessels Linked to Heart and Lung Disease: Marine shipping causes approximately 60,000 premature cardiopulmonary and lung cancer deaths around the world each year...”25 “Commercial ships emit almost half as much particulate pollutants into the air globally as the total amount released by the world’s cars...”26 “Large Cargo Ships Emit Double Amount of Soot Previously Estimated...”27 These are just a few of the headlines based on research by scientists at Carnegie Mellon and other prestigious institutions related to the damage that cargo ships cause.

  I’ve boarded these ships a couple of times in New York and Manila, when I worked for Greenpeace tracking hazardous-waste cargo. The word “ship” doesn’t remotely convey the reality of these monsters. Think gigantic apartment building lying on its side. I remember the first time I boarded one. Our team was wearing hard hats and official-looking black jackets that said “Toxic Trade Patrol,” with a pair of handcuffs dangling from our belts just in case we had to lock ourselves to an anchor chain to prevent the ship from setting off with hazardous cargo. When we insisted there was toxic waste hidden aboard the enormous vessel, the crew led us to the captain. We had to take an elevator to the eleventh floor to meet him.

  Ships were huge then and they’re actually getting bigger now. In order to accommodate ever-growing heaps of Stuff crossing the ocean, a whole new class of container ship has been developed: the jumbo vessel. Many of these are longer than three football fields and big enough to contain thousands of containers, each of which could hold all the contents of a three-bedroom house.28 One little hitch is that most of the ports around the world can’t actually accommodate these supersize ships, meaning that harbors will have to be dredged and enlarged. Plans have already been approved to expand the Panama Canal to allow these vessels to move through it.29

  It’s not just our hemisphere that is expanding its Stuff-distribution infrastructure. Between 2005 and 2010, China is planning to spend $70 billion annually for roads, bridges, and tunnels; $18 billion per year for railways; and $6.4 billion per year for ports.30 Three of the four highest-volume container ports in the world are in China already; Shanghai is at the top of the list, moving more than 350 million tons in 2007.31 Forty-three new airports were built there between 2001 and 2005, twenty-three of them in industry-heavy parts of western China.32 A primary goal of this new infrastructure is to lubricate the distribution of Stuff out of the country to international markets.

  Once Stuff arrives in the United States, it generally moves around in trucks. In 2005, 77 percent of the total weight of freight moved within the United States was carried on trucks that racked up more than 160 billion miles, a number that, at least prior to the economic crisis, was expected to double in the next thirty years.33 Particularly around highway interchanges, in crowded sections of highways, and while waiting in line to enter or leave ports, those trucks often get caught in traffic and sit there, idling, for hours on end. In fact, a recent study found that American freight trucks spent 243 million hours per year stuck in congestion.34 Delays like these cost the shippers between $25 and $200 per hour.35 But what about the costs to air quality and the climate, not to mention the public health impacts on asthma rates and cancer? The Air Resources Board in California estimated the costs to public health (including treatment of asthma and lung diseases) from freight trucks at $20 billion annually36; in New Jersey, environmental groups say it’s $5 billion per year.37 Old brakes and tires and frequent overloading increase the likelihood that these vehicles will have accidents, creating further costs in highway patrol and emergency services, traffic delays, etc.

  Finally, there’s air freight: this is the royal treatment in terms of consumer goods and is reserved for high-value and/or time-sensitive cargo, like designer clothes and some electronics. Although it doesn’t carry much of the total weight, 35 percent of the value of goods traded internationally travels by air, according to Giovanni Bisignani, the CEO of the International Air Transport Association.38 And that’s not all that’s disproportionate about air freight. A study in Europe showed that while planes carried just 3 percent of all European cargo’s weight, they contributed a whopping 80 percent of the total CO2 emissions from freight.39

  With the recent spikes in oil prices and looming regulations and/or taxes on CO2, some businesses and governments have already begun to address the energy use and greenhouse gas production from shipping. The U.S. EPA operates a program called SmartWay Transport, through which it works with shippers to reduce emissions. That means combining more sustainable railroad transport with trucking, for example; ensuring that trucks are loaded to full capacity and not wasting any
space; improving truck aerodynamics by making sure tarps aren’t flapping around and that loads are packed low and as streamlined as possible; monitoring and maintaining the air pressure of truck tires and replacing them with wider tires; training drivers in techniques like coasting when possible or limiting idling; and mandating slower speeds.40

  Some companies that specialize in freight have taken steps to green themselves. United Parcel Service, or UPS, has launched trucks with hydraulic hybrid technology that are supposed to “increase fuel efficiency by 60–70% in urban use and lowers greenhouse gas emissions by 40%, compared to UPS’s conventional diesel delivery trucks.”41 Not to be outdone, FedEx has peppered its fleet with hybrid electric vehicles that decrease particulate emissions by 96 percent and go 57 percent farther on a gallon of fuel than a conventional FedEx truck, reducing fuel costs by more than one-third.42 DHL has launched its own version of carbon offsets, offering customers the ability to tack on a 3 percent extra fee that DHL promises to invest in “green projects like vehicle technology, solar panels and reforestation.”43

  Nice as those efforts sound, they don’t get to the crux of the problem, which is this set of massive global supply chains (as long as ten thousand miles, according to some experts44), the consumer demand for more cheap Stuff delivered faster and faster, and the economic rules governing the whole show, which make it more profitable to make Stuff on the other side of the planet than close to home.

  With all of the above in mind, let’s look at the retail distribution of the same three items we zeroed in on last chapter. Although these aren’t the retailers I bought my Stuff from, for the sake of discussion let’s say the white T-shirt was sold by the low-end Swedish fashion giant H&M, that the book was bought via Amazon.com, and the computer was purchased at Wal-Mart (although it wasn’t, I promise). Studying these three megavendors will shed some light on the role of retailers in global distribution.

  H&M

  In addition to little white T-shirts, the Swedish clothing giant H&M sells more than 500 million items every year, from more than 1,700 stores.45 It’s the world’s third-largest clothing retailer, after Gap Inc. and Spain’s Inditex group, netting more than $440 million even in the relatively sluggish year of 2008.46 H&M is best known for its speed and reaction time—its “fast fashion.” Its clothes can be designed, produced, and distributed (from the drawing board to the hanger) in just twenty days.47 They are not made to last. Trendiness, combined with ridiculously low prices, is the secret to H&M’s success.

  Here’s lean manufacturing in play: like so many other well-known brand retailers, H&M contracts with the cheapest suppliers available, mostly in Asia and Eastern Europe, where it leverages its size to push wages ever lower and timelines ever shorter. It uses lots of suppliers simultaneously, which reduces the risk should one factory fall behind schedule and makes it easy to break off relations with one in favor of another without disturbing the flow of product. It’s constantly scouting for factories that undercut existing suppliers, prepared to jump without any sense of loyalty to the previous relationship.48 Trade protection laws, tariffs, and quotas also affect which suppliers and manufacturing locations H&M chooses. H&M’s speed and trendiness, meanwhile, has to do with its distribution machine. Many retailers of clothing (and increasingly also electronics, toys, and other items) reduce time in the supply chain by importing what are known as “greige goods.” These are partially prepped and assembled pieces produced overseas in the lowest-wage factories (think undyed fabric roughly precut for sleeves or torsos but not yet sewn together). Greige goods are shipped to factories close to the retail stores to be finalized, which could mean being given the neckline or sleeve length or specific color that consumers are snapping up that week.49

  In the United States, greige goods are usually brought by ship from Asia and then trucked from ports to assembly and distribution centers, and from there to stores. To keep the whole supply chain running, an enormous information technology brain and nervous system keeps track of the various suppliers, inventories, orders, means and routes of transport, weather, traffic, labor available for shipping and handling, etc. This IT system is under constant refinement, which, although an expensive endeavor, pays off by making distribution swifter every day.50 Flip back to the section on the impacts of producing my one laptop computer to get an inkling of what the true costs of an IT system of this magnitude must be.

  When consumer interest points to a certain trendy color or cut, H&M responds nearly instantaneously and floods their stores to meet the demand (that’s the lean retail piece). Dara O’Rourke, who tracks this so closely that he calls himself a “supply chain geek,” told me that trendy clothing stores used to have five distinct fashion seasons: each actual season (spring, winter, summer, fall), plus vacation. Now some retailers offer up to twenty-six distinct fashion “seasons,” which means that each “season” is just two weeks.51

  Every H&M store is restocked daily, while high-volume stores can receive as many as three truckloads a day.52 It is a constant mad rush getting those clothes in the back door and out the front door, with each sale automatically sending data back to the factories as to what’s hot. Even reading about the speed of their business makes me feel anxious; it’s like retailers on crack. I mean, really, what is all the rush about? Don’t we get more joy out of things like reading a great book or enjoying a meal with friends than from spending our money on this week’s hottest clothes? Does wearing last month’s or (gasp) last year’s T-shirt really make such a difference? H&M and many consumers clearly believe it does.

  H&M is an extreme example of the hypervelocity of today’s distribution systems. As fast-fashion consumers get addicted to the ever-changing offerings that blare at them from TV and movies, store windows and ads, H&M is only to happy to keep supplying the Stuff. We’ll see many of the same economic drivers with other products and retailers.

  Amazon

  When Internet shopping was just beginning, a lot of people thought this development would be good for the environment and amazing for small, independent businesses. After all, suddenly you could open a business without needing a physical storefront—you didn’t even need inventory, because things could be produced when an e-mail came in from a customer, assuming you could fulfill the order in a reasonable amount of time. And of course that’s all true. But overwhelmingly online retail has wound up supporting the same huge, insensitive companies that dominate in the brick-and-mortar world. In spite of the new potential for smaller companies to reach prospective consumers directly, about one-third of the $70 billion that Americans spent online in 2003 (that number had already topped $100 billion by 200653) went to just the top twenty Web retailers, with twelve of those being major chains.54

  Amazon.com is the undisputed emperor of this realm, priding itself on offering the world’s biggest selection of items, at prices below, or at least competitive with, what they cost elsewhere. To broaden inventory even further, it partners with other vendors (even large ones like Target) and provides them with warehousing and distribution. Technology is Amazon’s strongest suit and greatest investment (dwarfing H&M’s logistics system by umpteen degrees). Not only for the customer interface—the programs that create a personalized shopping experience and recommend products to users (as founder and CEO Jeff Bezos says, with so many items to choose from, they had to create ways to not only “enable customers to find products, but also enable products to find customers”55)—but also for the logistics of “fulfillment,” or processing an order and getting it to a customer. Imagine tracking a couple of million different products, as opposed to a couple of thousand. Amazon had to create its own “inventory optimization” software that Bezos compares to airline routing: complex algorithms create an optimal “pick path” through multi-million-square-foot warehouses so machines can find and fetch the specific items on order.56 It’s this enormous selection and the technological whiz-bang behind the personalized experience that the Amazon brand is all about.

  For mo
st people, it takes a will of steel to resist Amazon and instead choose a local bookstore, which charges the price that’s actually on the cover of the book and may well have to special-order a book because of its limited on-site inventory. Of course, as a result, the ranks of local, independently owned bookstores have been entirely decimated, which is a terrible loss.

  However, there’s still lively, ongoing debate among environmentalists about whether online shopping has a lighter footprint than traditional retail. Retail stores consume resources in their building, lighting, cooling, heating, etc., and consumers usually have to climb into their cars to reach them. However, e-commerce uses more packaging and is more likely to rely on air freight for at least part of the product’s journey. An in-depth study done specifically on book sales compared the two forms of distribution. In the traditional model, books are trucked from the printer to a national warehouse, then to a regional warehouse, and from there to the retail outlets. The customer travels to the store to buy the book and brings it home. In the online model, the book is trucked from the printer to a central warehouse. After the customer orders it, it’s packaged, flown to a regional hub, and trucked to the customer’s door.